Distillery products segment boosts MGP Ingredients earnings

ATCHISON, KANSAS, U.S. – MGP Ingredients earnings continue to be pushed by the performance of the Distillery Products segment. Third-quarter consolidated gross profit increased 23.2% to $18.6 million, reflecting stronger gross profit results in the Distillery Products segment. Net income increased 48.3% to $14.1 million for the third quarter.

For the third quarter of 2017, net sales for the Distillery Products segment increased 8.5% to $72.3 million, driven by a 16.1% increase in net sales of premium beverage alcohol. Gross profit improved to $16.5 million, or 22.8% of net segment sales, compared with $12.4 million, or 18.5% of net segment sales, in the third quarter 2016.

Gus Griffin

“We continued to see strong demand for our premium beverage alcohol products this quarter, supported by our ability to build strong partnerships with existing customers as well as attract new customers,” said Gus Griffin, president and chief executive officer of MGP Ingredients. “The continued strong growth of our premium beverage alcohol business, and the resulting favorable mix shift, more than offset the continued soft pricing for our DDG (Dried Distillers Grain) co-product, and delivered both revenue and margin growth.”

For the 2017 third quarter, net sales in the Ingredient Solutions segment increased 5.8% to $14 million. Gross profit decreased to $2.1 million, or 15.2% of net segment sales, compared with $2.8 million, or 20.8% of net segment sales in the third quarter 2016.

“We are particularly pleased with the progress and growth of our TruTex textured wheat protein business,” Griffin said. “The gains in our specialty wheat protein business were offset primarily by lower plant efficiencies, which we believe are temporary in nature.”

The company continues to focus on long-term growth.

“Year to date, our results underscore the significant opportunities afforded by our long-term strategy,” Griffin said. “The divestiture of ICP, as reflected in our results this quarter, allows us to further sharpen our focus on our key growth platforms. We continue to make progress against that strategy by expanding our premium beverage alcohol product offerings, capabilities and sales coverage. At the same time, we continue to invest in building our inventory of aged whiskey, and remain well positioned to meet our partners' needs and support the growth of the category. The value of that inventory, at cost, now totals $58.6 million.

“While still very early, we continue to be pleased with the progress of our brands initiative, as we focus on developing both our organization and brand portfolio. As recently announced, we will ship our limited-edition Remus Repeal Reserve later this month.”